How FasTracks could change your life

Rail line to DIA spurs the latest wave of transit-oriented development

By Keith DuBay

Published: 2016.03.23 02:45 AM

In 1997, the debate raged for Guide the Ride, the first big vote on a large sales tax increase for a massive train-oriented transit system in the Denver metro area. Critics called it a boondoggle that wouldn’t improve traffic and few would use.

The first campaign and its steep 0.4 percent sales tax increase was rejected by voters, derailed by a divisive Regional Transportation District Board of Directors, a vague design, and general lack of voter familiarity with the commuter rail concept.

Renamed FasTracks, the 122-mile, hub-and-spoke plan radiating from Denver Union Station was approved by voters in 2004, funded in part by the sales tax. As the system has progressed, usage has increased, spurring massive development near stations, which will number 78 at the end of 2016.

Ride the Mile High City’s light rail system and you’ll witness mushrooming apartment buildings, retail and restaurants in properties that once exuded industrial grime, railroad rust or were mere highway canyons. There are new micro-communities based on lifestyles of choice, density, proximity, ecology and transit, catering to the millennial generation that favors such an accessible, mobile lifestyle; and to others who want to downsize in an urban environment.

Whether the nearly $8 billion FasTracks project is a waste of taxpayer money or not, today the argument is moot. Most experts say Denver is only halfway through the FasTracks build-out, but the city and its suburbs are invested in transit development, and so are real estate stakeholders.

“If you would have told me 20 years ago we’d see this level of development, I would not have believed it,” said Bill Sirois, manager of transit-oriented development for RTD. “Being an advocate, I’d have hoped. But it has exceeded our expectations. It just took off.”

LoDo – a vibrant core

Step off the train at the Colorado Convention Center and you are steps away from swanky bars and restaurants that, to residents, employees or visitors of downtown Denver, seem to have popped up out of nowhere. At Denver Union Station, you’re surrounded by towering new office, high-rise apartment and condo buildings and the $500 million Union Station transit hub replete with hotel, retail, restaurants, bars, rail and bus connections. Coors Field, the Pepsi Center, Elitch Gardens and Sports Authority Field at Mile High are all light-rail accessible.

For decades, politicians, civic planners and the private sector have worked toward the vision of a vibrant, transit-oriented downtown, galvanizing a world-class city – and Union Station was to be the nexus of it all.

The University of Colorado A Line from Union Station to Denver International Airport will usher in a new era of travel when it opens in April. Employees at the new Panasonic Enterprise Solutions Co. headquarters at the 61st and Pena Boulevard commuter-rail stop will be able to park at work, jump on the A Line and catch a flight without paying to park. Visitors can stay at the new Westin DIA for conferences, along transit lines, or downtown without renting a car. It will be 37 minutes from DIA to downtown for dinner, meetings or entertainment.

“The A Line will be transformative for Denver,” said Jeff Shoemaker, executive director of The Greenway Foundation, which itself has either funded or been involved with half a billion dollars in public and private investment along the South Platte and its tributaries, with a good chunk of that going to the LoDo area. Shoemaker is an avid observer of transit development.

“Part of the reason why the development is as popular as it is, is because light rail has been built along historic lines of transportation,” Shoemaker said. “I’m now 60, with 35 years at the Greenway Foundation. I’ve never seen Denver as enlivened, as emboldened, as vibrant. The pulse of the city on all fronts is unprecedented in my lifetime. I view it as evolution.”

Works in progress

Transit isn’t making development happen by itself. Transit stops in Dallas, Portland and even Denver, have sat empty for more than a decade. It takes collaboration between local governments, utilities, neighborhood groups and private business to make development happen — collaboration for which Denver Metro has earned a national reputation. The forces behind the recent TOD success in Denver Metro are enormous. The Great Recession and its effect on millennials’ ability to obtain jobs, buy homes or rent housing, as well as their desire for city living and transit alternatives, are fueling development. The economic recovery and the need for new housing is another obvious moving force.

“Today’s current and upcoming generations see it differently: We can’t have a thriving, creative, modern economy without healthy urban centers,” wrote Chris Achenbach, construction manager at Zocalo Community Development, in the monthly newsletter of the Urban Land Institute Colorado. “Whether suburban or urban, our communities must offer compact, mixed-use developments connected by transit choices that include trains, buses, bicycles and good old-fashioned walking.”

If you are trying to gauge the dollars invested in TODs, you arguably should include downtown Denver as one giant TOD, because of its role as a transit nexus for the region. It’s also unlikely the sports stadiums would have been built where they were without some consideration of mass transit.

Public and private dollars have been invested in LoDo since the 1980s. Even a cursory review of invested dollars puts that number at more than $2 billon, including the $280 million bond issue in the 1980s used to begin cleaning up the Platte Valley rail yards; the 16th Street Mall (opened in 1982); Colorado Convention Center (1990); Coors Field and Elitch Gardens (1995); Pepsi Center, Denver Aquarium, Commons Park and South Platte clean-up (1999); the Southwest Light Rail Line (2000); RTD’s purchase of Union Station and surrounding rail yards, and Sports Authority Field (2001).

Add that to statistics the Downtown Denver Partnership began tracking in 2007, after voters approved FasTracks and the real work began. DDP says that $6.054 billion in investment has occurred in downtown through 2014 and under construction in 2015, primarily in LoDo during that time. If you subtract $314 million in FasTracks contribution to Union Station in order to avoid double counting, that still represents about $7.7 billion of public and private investment in transit and downtown revitalization.

Along the lines

Investment in real estate is booming along rail lines, but how much? The standard RTD response is that FasTracks is good for the economy. The agency uses the same statistics for inquiries: that $5.3 billion has been invested or committed to date in the region; that every $1 invested in transit infrastructure translates into a $4 return over 20 years, and that it has created 13,000 direct full-time jobs since 2005.

RTD tracks new development that occurs within one-half mile (along rail lines) of a train station. RTD said that between 2006 and 2013, 16,270 residential units, 2,296 hotel rooms, 3.2 million square feet of retail, 5 million square feet of office space and 9.4 million square feet of institutional space – such as government and medical buildings – were built.

The agency does not, however, track investment dollars along rail lines specifically.

Many Denver Metro communities have plans for dense development around new stations. As such, planners are counting on the collaborative nature of government bodies and the private sector that got the system to where it is today to accomplish each TOD in the future.

“Communities on those new lines are ahead of the curve. That’s the biggest change in philosophy,” said Tim Baldwin, principal of Rocky Mountain West and Urban Planning. He is working on several north metro line TODs. “When the Southeast and Southwest lines opened, TOD was an afterthought. You had to retrofit next to highway corridors. With new lines coming in, communities are trying to get ahead of the curve so that they can positively influence what happens around the station. That’s a big change.”

Some experts say growth would likely have occurred with or without transit, but transit is preferred, based on generally higher land values and lease rates. International TOD expert GB Arrington, who operates GB Place Making consulting in Portland, Ore., said he can’t forecast TOD growth because there are too many variables. “I’m not willing to say Denver will grow faster because of rail, but I’m willing to believe that places (TODs) will develop differently.”

National transit critic Wendell Cox, visiting fellow for the conservative Thomas A. Roe Institute for Economic Policy Studies, argues that on an inflation-adjusted basis, each 1 percent increase in ridership has been associated with a 9 percent increase in expenditures. A large portion of the expense in most cities has to be subsidized by taxpayers.

Cox said that even he is impressed with the transformation of Denver’s downtown, but adds, “When I see transit ridership go up, I will take notice. But I reject any thought that people are moving to Denver because of light rail.” Still, he said he does not argue about economic investment in TODs because there’s a lack of data.

Rhetoric talks, big bucks walk

As opportunities for economic investment studies go, this one is a doozy. Dallas, the city Sirois compares most closely to Denver, commissioned a study that showed new developments between 1993 and 2013 close to light rail totaled more than $1.5 billion in valuation, with $3.8 billion in the planning stages. Portland’s MAX system station development has topped $10 billion. In the national debate over intermodal transit, it would be instructive for other cities to understand the potential economic impact of it. You can’t convince voters on faith in quality-of-life alone.

Denver ridership is robust, setting a record in 2014, and growing. The trains provide transit alternatives and pollution mitigation. Denver and its suburbs are going full throttle on transit development, and not just downtown, because things are happening in numerous station developments, many of them connected with renewal of blighted suburban areas.

How much will the present and future public and private investment in transit development add up to in the end? We don’t know. Not counting the non-downtown lines, the number stands at roughly more than $15 billion, and counting. When pressed for an estimate of the present and future system-wide investment, Sirois replied, “I don’t know. Billions.”

Keith DuBay of BlueCoast Media Group is a 30-year veteran of the media as reporter and editor, author of more than 4,000 articles and columns focusing primarily on business coverage. He has won more than 30 awards for reporting and writing, has served as communications director of the Transit 97 campaign and has been in private business with his own media relations firm and as a business development officer for two investment banking firms. He helped co-found the Denver Chapter of the Association For Corporate Growth in 1999 and later served as executive board member and president. Contact him at keith@bluecoastmediagroup.com.

In a widely-publicized set of perspectives released earlier this month by the Denver Metro Association of REALTORS® (DMAR), the metro area appears to have just crossed the large average price threshold of $500,000.